How does Arctis' valuation (P/E, EV/EBITDA, price-to-sales) compare with peers in the dermatology/ biotech sector after this release? | ARCT (Aug 06, 2025) | Candlesense
ARCT

How does Arctis' valuation (P/E, EV/EBITDA, price-to-sales) compare with peers in the dermatology/ biotech sector after this release?

Answer

The press release you referenced only tells us that Arcutis (ARCT) announced its second‑quarter 2025 results and gave a business update. It does not include any of the valuation multiples that are needed to directly compare the company’s price‑to‑earnings (P/E), enterprise‑value‑to‑EBITDA (EV/EBITDA) or price‑to‑sales (P/S) ratios with its dermatology‑ or biotech peers.

Below is a step‑by‑step outline of how you could perform that comparison once the necessary data are available, together with a brief context on what you would typically see in this peer group.

1. What data are required?

Metric Where to obtain it
Current share price (to calculate P/E and P/S) Major market data feeds (e.g., Bloomberg, Reuters, Yahoo! Finance)
Net income (or EPS) for the trailing twelve months (TTM) or the most recent quarter Company’s 10‑K/10‑Q filings, earnings press releases
Revenue (sales) for the same period Same sources as net income
EBITDA (or an EBITDA estimate) for the same period Company filings, analyst estimates, or calculate from operating income + depreciation & amortisation
Total debt and cash (to compute enterprise value) Balance sheet in the 10‑K/10‑Q
Shares outstanding Company’s capital‑structure footnotes or investor‑relations site

Valuation formulas

  • P/E = Current Share Price Ă· EPS (TTM)
  • EV/EBITDA = (Market Capitalisation + Total Debt – Cash) Ă· EBITDA
  • P/S = Current Share Price Ă· (Revenue Ă· Shares Outstanding)

2. Typical valuation ranges in the dermatology/biotech space (as of the 2024‑2025 data‑cutoff)

Peer P/E (TTM) EV/EBITDA P/S
DermTech (hypothetical) 35× 18× 6.5×
Almirall (ALM) – a larger, diversified dermatology player 28× 12× 4.8×
Aclarion (ACR) – a biotech with dermatology focus 45× 22× 8.0×
Novartis (Dermatology segment) – not a pure‑play but often used as a benchmark 20× 10× 3.5×

These figures are illustrative only; they reflect the general “high‑growth, specialty‑drug” premium that many pure‑play dermatology companies command compared with broader biotech or pharma peers.

3. How to interpret the multiples

Multiple Interpretation
P/E A high P/E (e.g., >30×) suggests the market expects strong earnings growth or sees the business as having a durable competitive moat (e.g., differentiated topical formulations, pipeline depth). A low P/E relative to peers could indicate either slower growth expectations or a perception of higher risk.
EV/EBITDA EV/EBITDA is useful for companies that still have negative earnings but positive operating cash flow. In dermatology, EV/EBITDA often ranges from 12× to 25× for high‑margin, cash‑generating businesses. A number above the peer median may reflect premium pricing for a robust pipeline or strategic assets (e.g., novel biologics).
P/S Because many dermatology firms are still in the “revenue‑growth” phase, P/S can be a cleaner gauge. A P/S > 6× is common for niche, high‑margin topical or biologic players; lower values (<4×) may point to a more “commodity‑type” business or a company that is still early‑stage.

4. What to do next with Arcutis

  1. Gather the numbers – Pull Arcutis’ latest 10‑Q (Q2 2025) and the most recent 10‑K (or the prior year’s 10‑K) to get:

    • Net income (or EPS) for the trailing twelve months.
    • Revenue for the same period.
    • EBITDA (or calculate it from operating income).
    • Total debt, cash, and shares outstanding.

  2. Calculate the multiples using the formulas above.

  3. Select comparable peers – For a fair “peer” set, you might include:

    • DermTech (DERM)
    • Almirall (ALM)
    • Aclarion (ACR)
    • Novartis’ Dermatology segment (if you want a “large‑cap” benchmark)
    • Other niche biotech firms with dermatology pipelines (e.g., Cytokinetics, Incyte, AstraZeneca’s Dermatology business).

  4. Benchmark – Place Arcutis’ multiples side‑by‑side with the peer set. Note any outliers:

    • If Arcutis’ P/E is markedly higher than Almirall but similar to Aclarion, the market may be pricing in a stronger pipeline (e.g., upcoming biologic launches).
    • If EV/EBITDA is lower than the median, perhaps the company’s balance sheet is relatively clean (low debt) or its EBITDA margin is still modest.
    • A P/S that is above peers could indicate that investors view the revenue base as higher‑margin or that the company commands a premium for its brand‑positioned products.

  5. Contextualize with the Q2 2025 update – The press release likely highlighted:

    • Revenue growth (e.g., “net sales rose 35% YoY”)
    • Margin expansion (e.g., “gross margin improved to 78%”)
    • Pipeline milestones (e.g., “Phase 3 data for XYZ expected Q4 2025”)

These qualitative points can help explain why the market may be assigning a premium (or discount) to the valuation multiples.

5. Sample “what‑if” illustration (purely illustrative)

Metric Arcutis (illustrative) Peer Median (Dermatology)
P/E (TTM) 42× 33×
EV/EBITDA 19× 15×
P/S 7.2× 5.8×

Interpretation: In this hypothetical scenario, Arcutis trades at a higher P/E and EV/EBITDA than the median peer, reflecting market optimism about its upcoming product launches and strong gross‑margin profile. Its P/S is also above peers, suggesting that investors view each dollar of sales as more valuable—likely due to higher profitability or a differentiated franchise.

6. Bottom line

  • The press release you provided does not contain the valuation multiples needed for a direct comparison.
  • To answer the question accurately, you’ll need to pull the latest financial statements and market data for Arcutis and a set of comparable dermatology/biotech companies.
  • Once you have those numbers, the framework above will let you compute P/E, EV/EBITDA, and P/S and see where Arcutis stands relative to its peers—whether it commands a premium (higher multiples) or a discount (lower multiples) based on growth expectations, margin profile, and pipeline de‑risking.

If you can supply the missing financial figures (e.g., EPS, EBITDA, revenue, debt, cash, shares outstanding) or point to a specific data source, I can walk you through the exact calculations and produce a concrete side‑by‑side table. Otherwise, the steps outlined will guide you (or an analyst) to generate the comparison yourself.

Other Questions About This News

What risks or opportunities did management highlight in the business update, and how might they affect the stock's risk/reward profile? What impact might the earnings release have on ARCT's stock price and trading volume in the short term? What is the status of Arctis' pipeline products, and are there any upcoming regulatory submissions or approvals that could affect future revenue? What are the key drivers behind any revenue growth or decline in this quarter (e.g., product launches, geographic performance, or pricing changes)? What are the company's cash position, cash flow from operations, and any changes in operating cash burn compared to prior periods? Are there any notable changes in guidance for R&D spending and the timeline for upcoming product launches? How did the segment performance (e.g., Dermatology vs. other divisions) contribute to the quarter's results? How did the actual Q2 2025 earnings and revenue compare to analysts' consensus estimates? Did Arctis revise its forward guidance for 2025, and if so, why? How does the reported gross margin and operating margin compare to the previous quarter and year‑over‑year? What guidance did Arctis provide for Q3 and full-year 2025 revenue, EBITDA, and net income?